Accusations Dog Russian Copter Deal

Associated Press|9 Dec 2013|by Richard Lardner

WASHINGTON -- The deal looked sketchy from the start.

To outfit Afghanistan's security forces with new helicopters, the Pentagon bypassed U.S. companies and turned instead to Moscow for dozens of Russian Mi-17 rotorcraft at a cost of more than $1 billion.

Senior Pentagon officials assured skeptical members of Congress that the Defense Department had made the right call. They repeatedly cited a top-secret 2010 study they said named the Mi-17 as the superior choice.

Turns out the study told a very different story, according to unclassified excerpts obtained by The Associated Press.

An American-made helicopter, the U.S. Army's workhorse Chinook built by Boeing in Pennsylvania, was found to be "the most cost-effective single platform type fleet for the Afghan Air Force over a 20-year" period, according to the excerpts.

The finding has triggered allegations the Defense Department misled members of Congress and improperly cut U.S. companies out of competing for a contract that has swelled to more than $1 billion.

More than two years since DoD announced it was acquiring Russian Mi-17 helicopters, a veil of secrecy still obscures the pact despite its high-dollar value, the potential for fraud and waste, and accusations the Pentagon muffled important information.

The unprecedented arms deal also serves as a reminder to a war-weary American public that Afghanistan will remain heavily dependent on U.S. financial support even after its combat troops depart.

Sen. John Cornyn of Texas, the Senate's No. 2 GOP leader, said DoD "repeatedly and disingenuously" used the 2010 study to justify the Russian helicopter as the superior choice for the Afghans.

Congress only recently received a copy of the document.

"So why are we buying Russian helicopters when there are American manufacturers that can meet that very same requirement?" Cornyn asked

As recently as September, Deputy Defense Secretary Ashton Carter cited the study in a letter to House members defending the Mi-17 decision. Carter left his job this past week.

Last year, Frank Kendall, the Pentagon's top acquisition official, and policy chief James Miller pointed to the study in a written response to questions posed by Cornyn.

Just a few weeks after the secret study was completed, Army Secretary John McHugh wrote in a 2011 memo "that the Mi-17 stands apart" when compared with other helicopters.

The Pentagon denies it misled Congress.

A senior department official said the study was focused on long-term requirements and not the immediate needs of the Afghan military, which were best met by the Mi-17. Also, U.S. commanders in Afghanistan wanted the Mi-17 because it is durable, easy-to-operate and the Afghan forces had experience flying it, according to the official, who was not authorized to be identified as the source of the information.

There's no dispute that heavy-duty helicopters capable of quickly moving Afghan troops and supplies are essential to accomplishing that mission. But the decision to acquire them from Russia has achieved the rare feat in a deeply divided Congress of finding common ground among Republicans and Democrats.

Why, lawmakers from both political parties have demanded, is the U.S. purchasing military gear from Russia?

After all, Russia has sold advanced weapons to repressive government in Syria and Iran, sheltered NSA leaker Edward Snowden and been criticized by the State Department for adopting laws that restrict human rights.

On top of all that, corruption is rampant in Russia's defense industry, they say, heightening concerns that crooked government officials and contractors are lining their pockets with American money.

"The lack of straightforward information from the Pentagon on the ability of American-made helicopters to meet the mission in Afghanistan is but another factor severely undermining their credibility and justification for pursuing this sorely misguided procurement," said Rep. Rosa DeLauro, a high-ranking Democrat on the House Appropriations Committee.

Overall, 63 Mi-17s are being acquired through the 2011 contract. It was awarded without competition to Russia's arms export agency, Rosoboronexport, even though the Pentagon condemned the agency after its weapons were used by Syria to "murder Syrian civilians."

No Pentagon official was made available to speak on the record for this story. The department declined AP's request that it release unclassified portions of the 2010 study and other records supporting the decision to buy Mi-17s instead of Chinooks or other helicopters.

The armed Mi-17s being purchased for Afghanistan from Rosoboronexport will replace older and less capable Mi-17s the U.S. and other countries had purchased from brokers and contractors through the open market and then donated or loaned to the Afghans.

The fact that the Afghan forces had years of experience flying the Mi-17 figured prominently in the Pentagon's decision.

Carter and other U.S. defense officials contended that adding the Boeing helicopter to the mix would unnecessarily burden the Afghans with having to learn how to operate and maintain an unfamiliar helicopter.

The 2010 study "specifically analyzed the opportunity for DoD to provide a U.S. alternative to the Mi-17 for Afghanistan," according to the excerpts.

It outlined a transitional approach in which Chinooks being retired from the U.S. military's fleet would be available in late 2013 to be refurbished and then replace older Russian helicopters in the Afghan fleet, according to the excerpts. A combination of Mi-17s and renovated Chinooks, known in the Army's nomenclature as the CH-47D, could work as well.

Proceed with caution, the study advised. Shifting too quickly away from the Mi-17s already in use could undermine progress in training the Afghan air force, the excerpts said. But the study recommended a plan for converting the Afghan forces from a "pure" Mi-17 fleet to one that uses U.S. helicopters.

The Chinook option never materialized.

An extensive analysis of both helicopters concluded a refurbished Chinook would cost about 40 percent more overall to buy and maintain than the Russian helicopter, the senior defense official said.

That is hard to fathom.

Boeing executives informed congressional staff during a meeting held in late September that the cost of a refurbished CH-47D would be in the $12 million to $14 million range, according to a person knowledgeable about the discussion but not authorized to be identified as the source of the information.

That would make an overhauled Chinook $4 million to $6 million less than what the department is currently paying for Mi-17s, according to a Pentagon document listing the prices it is paying for the Russian aircraft.

The figures also show the average cost of each new Mi-17 has increased with each successive order, from $16.4 million to $18.2 million. The Pentagon has assured Congress that the prices were "fair and reasonable."

But an internal Defense Contract Audit Agency document shows the department could not conduct a comprehensive cost comparison because Rosoboronexport wouldn't allow U.S. auditors to look at its books.

Rosoboronexport's Director General Anatoly Isaykin said in statement late last month that his agency was "completely transparent" in negotiating acceptable Mi-17 prices with the U.S. but provided no details on costs or any examples of transparency.

Last month, the Pentagon changed its mind. After reevaluating, officials decided to cut 15 copters out of the 78 they had planned to buy from Moscow.